“If this (the Tata-Jet deal) happens, then it will consolidate two to three large players,” said Peeyush Pandey, a partner at Deloitte.

However, the reports also suggested that the discussions have failed to make much headway as the question of Jet’s management control is a sticking point. The deal’s success will depend on whether chairman Naresh Goyal, who owns a 51% stake in the company, is willing to relinquish control 25 years after founding the company.

Jet Airways has denied the reports as “highly speculative” to the Times of India. Mails sent to the two companies from Quartz failed to elicit responses.

Jet’s rumoured talks with the Tatas are taking place at a crucial juncture.

A troubled company

The Tata Group’s obsession with aviation predates the country’s Independence. Now the conglomerate is looking to consolidate its position in the Indian skies.

Tata Sons, the holding company of the Tata Group, already owns 51% in domestic full-service carrier Vistara, a joint venture (JV) with Singapore Airlines, and 49% in budget airline AirAsia India, its JV with Malaysia-based AirAsia. With rivals reeling from high aviation fuel prices and a weak rupee, this might just be the moment for the group to scale up.

Jet, too, has been struggling for some time now. It has been under pressure to service its huge pile of debt, which, as of June this year, stood at Rs8,620 crore ($1.18 billion).

It has also been struggling to pay salaries to its staff. The firm had withheld wages to many categories of employees in September, insiders from the industry had told Quartz earlier.

Last week, Jet’s chief people officer Rahul Taneja finally communicated to its employees in a mail that it would disburse 25% of September’s delayed payments to its pilots, engineers, and the senior management on Oct. 25.

The crisis escalated this month as it came to light that Jet is trimming its workforce: It handed pink slips to at least 15 managers- or general manager-level employees from departments like engineering, security, and sales, according to media reports.

It also reportedly grounded eight of its planes at the Chennai and Mumbai airports in October following difficulty in meeting lease payment obligations. The aircraft are expected to remain grounded for six months or more.

Faced with financial woes, Jet has been looking for ways to raise funds and stay airborne. Discussions are on with private equity firms Blackstone and TPG to sell stake in its loyalty programme, Jet Privilege, according to reports.

Jet Airways is also reportedly trying to raise about $800 million (Rs5,860.4 crore) from the sale and leaseback of 16 aircraft it owns. A sale and leaseback is an arrangement wherein an aircraft owner sells a plane and then leases it from the buyer. This helps remove an aircraft and its associated debt from the original owner’s balance sheet.

So, clearly, a certain desperation has set in at the Gurugram-based company.

Mutually beneficial

Some analysts say the current troubles for Indian aviation companies may be because there are too many players in the sector.

“The problem with the aviation sector now is overcapacity. Tata may see an opportunity in this turmoil as they may get to acquire some good quality assets. In such a hostile (market) environment, acquiring a company will give them an opportunity to work out the synergies effectively,” said Ashish Nainan, research analyst for the aviation sector at ratings agency CARE.

A potential merger with Jet can ramp up Tatas’ fleet to around 160 aircraft, up from the current 38 (Vistara’s 20 and AirAsia’s 18). This will bring it within touching distance of Air India’s 163 aircraft, though still behind market leader IndiGo’s 192, according to data from the companies’ websites.

Jet also provides a chance for the Tatas to make another attempt to build an airline they can genuinely call their own. The group had shown interest when the government, in March, announced plans to sell a 76% stake in the national carrier Air India. The plans didn’t work out, though.

However, Jet Airways would be a better option than Air India for the company since the former has more international routes. “Airline companies are experimenting with new business models, whether to focus on regional business or expand to bigger territories,” said Deloitte’s Pandey.

If trends from more mature markets are anything to go by, consolidation is inevitable.

Fewer the merrier

The great recession of 2008 forced US legacy carriers like American Airlines and Delta Airlines to significantly slash capacities. The turmoil led to a number of mergers and acquisitions (M&As) in the sector. Continental Airlines, for instance, merged with United Airlines in 2010 and US Airways merged with American Airlines in 2013.

These mergers changed the face of US aviation, besides pulling some of the airlines out of bankruptcy. The M&As consolidated the capacities of the top four US airline companies, American, United, Delta, and Southwest Airlines. By 2016, these four controlled almost the entire market (85%).

In India, on the other hand, about eight players currently vie for a much smaller pie. The intense competition has meant that airlines are unable to pass on higher costs to consumers.

Like the 2008 US financial crisis, Indian aviation, too, may advance in a similar fashion. “These experiments (M&As) in the aviation sector will continue till a success story emerges,” said Pandey.

But not all are convinced.

“Consolidation would mean five or seven coming together as one, or when two strong guys merge to form a super-strong airline. Buying a stake in a company that’s struggling to be alive isn’t consolidation. It’s survival,” said Mark Martin, CEO of the aviation consultancy Martin Consultancy.

So, will aviation’s current crisis separate the men from the boys? The answer is still in the making.